Getting Gen Z: Updating Business Models to Get Young People Invested in Investing

Financial trends like widely applied investment algorithms, robo-investing, no fees; these are features meant to entice tech-savvy and data-driven millennials and they worked well…until they didn’t. While it’s wise to understand Gen Z’s habits, interests, and trends, advisors and their clients shouldn’t repeat history, but learn from it.

As Gen Z enters adulthood, it’s time to reflect on lessons learned with Millennials and use that information to make informed decisions on do’s and don’ts when marketing to the newly minted young adults. Financial trends like widely applied algorithms, robo-investing, no fees; these are features meant to entice tech-savvy and data-driven millennials and they worked well…until they didn’t. While it’s wise to understand Gen Z’s habits, interests, and trends, advisors and their clients shouldn’t repeat history, but learn from it.

Some professionals are exploring how social media can help them connect with younger audiences. It’s easy to find advisors (as well as financially literate but professionally uncertified individuals) on Instagram, Snapchat, TikTok, and other fast-paced channels trying to dispense as much financial wisdom in short text posts or 60 seconds of video as possible. The motivating factor behind this is clear: almost anything can be learned online these days, from cooking to art to fighting inflated hospital bills, so why not financial literacy?[1]

Some advisors are already dispensing advice on these platforms, and many others may be tempted to do so as well. However, anyone considering this medium should proceed with caution; while it’s wise to meet potential investors where they are, social media isn’t always compliance-friendly, and there are concerns around data security and archiving.[2][3] In a world where front-facing messages and content can disappear, but background datamining is forever, it’s important to play it safe with the information being shared over social media or being stored alongside it. Recordkeeping can be tricky for similar reasons; for example, Snapchat isn’t designed to create permanent content, so advisors must keep on their toes and manually create an archive of their content if they use this platform.

Additionally, content matters. The video by Shaunna Burns doling out hospital bill advice isn’t flashy, fashionable, or trendy, yet it has been viewed hundreds of thousands of times and received over 780,000 likes because she’s able to convey important, helpful information concisely and quickly. Content is always more important than trendiness, and while beginners are going to want short, easy to understand sound bites, paring down complex concepts into a clip under a minute long means that important nuance is necessarily lost, so advisors should think long and hard about what content is best suited to the communication style of each type of platform. Ms. Burns’ advice comes from an industry professional and has a very healthy ROI that is highly unlikely to lead to any type of financial loss—by following her lead, the worst outcome is that nothing changes, but very possibly one may find their hospital bill reduced. Financial advising is markedly different in the risk investors inherently take on, and appropriate consideration and caution should be applied. Though it may be a great place for teens and young adults to learn the basics of budgeting 101, investment specifics are inherently a bit trickier.

However, just because TikTok may not be the ideal platform for some doesn’t mean that accessibility (both in terms of platform as well as plain-English content) isn’t important in advising. Gen Z is the first generation to grow up alongside technology, whereas Millennials adapted from analog to digital in several steps over their lifetimes. The Pew Research Center calls Gen Z “digital natives who have little or no memory of the world as it existed before smartphones.”[4] The digital sphere can’t be ignored, but must still be approached with caution.

Regardless of platform or how financial advice is communicated, the biggest hurdle may be motivation. While Millennials grew up being told that hard work and a college education would lead to success, then later saw that idea crumble before their eyes as teenagers and young adults, Gen Z grew up in a world shaped by economic recession, rising college costs and expectations of debt, and depressed wage growth; they don’t know anything else. “Instead of looking ahead to a world of opportunities, Gen Z now peers into an uncertain future,” the report above notes. The Pew Center also found that the impact of COVID-19 on this generation illustrates this point well; “half of the oldest Gen Zers (ages 18 to 23) reported that they or someone in their household had lost a job or taken a cut in pay“ compared to the second-highest demographic, which was Millennials at 40%. Things frankly look bleak for Gen Z, and with little hope for change, some may simply not see the point in investing in a future that doesn’t seem to be getting better. Advisors’ may find their time is more valuably spent focusing on content that addresses reasons to invest and making a daunting topic more accessible to the investment novices, rather than figuring out how to edit a TikTok video or learning how to incorporate Fortnite dances into their YouTube channel.





These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.

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